Disregarded Entities (Sales and Use and Withholding Taxes)

  1. Is a single-owner entity that is disregarded as a separate entity for Wisconsin income and franchise tax purposes under Chapter 71 of the Wisconsin Statutes ("disregarded entity") also disregarded for Wisconsin sales and use tax purposes?

  2. How does the law affect transactions between the owner and the disregarded entity?

  3. What sections of the sales and use statutes apply?

  4. Does the owner or the disregarded entity report the sales of the disregarded entity?

  5. Are there any transitional provisions that apply for purchases prior to July 1, 2009?

    • Example 1: Construction Company's Purchasing Entity

    • Example 2: Transportation Company

    • Example 3: Leasing Company

    • Example 4: Disregarded Entity's Business Assets Transferred to Owner

    • Example 5: Disregarded Entity's Business Assets Transferred to Unrelated Company

  6. How does the law treat disregarded entities for withholding tax purposes?

  7. How do I register my business?

  8. What should I do if my business is not properly registered or if I change my business structure, relating to disregarded entities?

  9. Since an owner and its disregarded entity are considered a single entity for Wisconsin sales and use tax purposes, if a disregarded entity has nexus in Wisconsin, does the fact that the disregarded entity has nexus in Wisconsin create nexus for its owner and the owner's other disregarded entities?

  10. When a Department of Revenue notice is mailed, to whom does the notice apply?


FOR QUESTIONS OR COMMENTS CONTACT:

MS 5-77
WISCONSIN DEPARTMENT OF REVENUE
Customer Service Bureau
PO Box 8949
Madison, WI 53708-8949
Phone: (608) 266-2776
Fax: (608) 267-1030
Email additional questions to DORSalesandUse@wisconsin.gov

December 19, 2018